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The Court of Appeal has given important guidance for solicitors acting for claimants in quasi group litigation, weighing on the one hand the reality of pressures facing solicitors seeking to bring a large number of claims, against on the other hand the need to ensure proper compliance with, and use of, the Court’s processes.

The appeal was heard on the factual premise that the Claimants’ solicitors had issued proceedings in the names of 273 investors (in certain tax mitigation investment schemes), in the face of a potential limitation deadline approaching, and without actual authority from a number of them to do so. Prior to service the claim form was amended so as to reduce the number to 170. It was common ground that by the time of the hearing below, all named claimants had authorised or alternatively ratified the claim form issued in their names.

Three Defendants applied to strike the claim form out inter alia on the basis (a) that following the introduction of the requirement for a statement of truth by Part 22 of the Civil Procedure Rules, a claim form issued without authority could not be ratified; and (b) that the claim form was in any event an abuse of process following Granada v Nomura [2008] Bus LR 1.

Decision

The Court of Appeal held that the principle recognised in Presentaciones Musicales SA v Secunda [1994] Ch 271 (CA) permitting ratification of claim forms even so as to circumvent a potential limitation period, was not reversed by the introduction of the CPR. The claim form was not a nullity and was thus capable of ratification.

The Court further held that there was no categorical rule that a claim form issued without authority was an abuse of process. The question was fact sensitive and on the facts of the present case the claim form was not abusive.

Toulson LJ suggested that the appropriate course of action might in future be to give a statement of truth only on behalf of those individuals who have expressly authorised the solicitor.

Arden LJ posed the question:

The present case presents at an abstract level a dilemma for procedural law. Should it allow a person to start proceedings on behalf of another which he or she considers could be in that person's best interests and which that person might, if he or she knew about the possibility, wish to start for himself or herself in order to avoid the risk that they become statute-barred? He or she would be a sort of Good Samaritan, finding a person disabled from acting on his or her own behalf and aware that a right to sue may be lost if no action is taken.

The passage highlights the different instances in which unauthorised proceedings might be issued. In giving the answer to the question posed, that the law should permit such proceedings, Arden LJ referred to the effects of changes in the nature of group litigation, third party funding and insurance. While it was important that solicitors and litigants should be open with other parties where unauthorised proceedings are issued, she concluded that it was important to judge a solicitor’s actions as one might a rescuer, applying the “reason fitted and proportioned to the time and the event”.